November 13, 2013

Discretionary SpendingOption 17

Function 400 - Transportation

Increase Fees for Aviation Security

(Billions of dollars) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014-2018 2014-2023
Change in Spending                        
  Budget authority 0 -0.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -4.2 -11.3
  Outlays 0 -0.3 -1.3 -1.3 -1.3 -1.4 -1.4 -1.4 -1.5 -1.5 -4.2 -11.3

Note: This option would take effect in October 2014. Fees collected under this option could be recorded in the budget as offsetting collections (discretionary), offsetting receipts (usually mandatory), or revenues, depending on the specific legislative language used to establish them.

The Aviation and Transportation Security Act, enacted in response to the attacks of September 11, 2001, made the federal government, rather than airlines and airports, responsible for screening passengers, carry-on luggage, and checked baggage. Implementing new standards under the 2001 law required the hiring of screeners who were more highly qualified and trained, necessitating increased compensation and raising overall security costs. To help pay for increased security, the law directed airlines to charge passengers a fee, remitted to the government, of $2.50 for a one-way trip with no stops and $5 for a trip with one or more stops. The 2001 law also authorized the government to impose fees on the airlines themselves. In 2012, the Transportation Security Administration collected about $2 billion from the fees on passengers and airlines—less than half of the $5 billion federal aviation security budget that year.

This option would increase fees to cover a greater portion of the federal government’s costs for aviation security. Passengers would pay a flat fee of $5 per one-way trip because travelers typically pass through security screening only once per one-way trip. Implementing the option would boost collections (and thus reduce net spending) by $11 billion from 2015 through 2023, the Congressional Budget Office estimates. Under standard budgetary treatment, the collections would be classified as revenues, but because the Aviation and Transportation Security Act requires that revenues from the existing fees be recorded as offsets to federal spending, the budgetary impact of this option is presented that way.

The arguments for and against this option rest on the principle that the beneficiaries of a service should pay for it. The differences lie in who is seen as benefiting from such measures. A justification for the option is that the primary beneficiaries of transportation security enhancements are the users of the system, and that security is a basic cost of airline transportation in the same way that fuel and labor are. The current situation, in which those costs are covered partly by taxpayers in general and partly by users of the aviation system, provides a subsidy to users of air transportation.

Conversely, an argument against higher fees is that the economy as a whole and the public in general—not just air travelers—benefit from the availability and security of air transportation. To the extent that greater security reduces the risk of terrorist attacks, the entire population is better off. By that reasoning, the federal government should fund at least part of its transportation security measures without collecting funds directly from the airline industry or its customers to pay for them.